India: Bangalore MFI Janalakshmi raises $14.6M from GAWA, IFIF & others

Jul 2012
Bangalore, July, 16 2012 - Bangalore-based microfinance institution Janalakshmi Financial Services Pvt Ltd has raised another Rs 80 crore ($14.6 million as per current exchange rate) in its Series C round of funding, taking the total amount raised in Series C to Rs 145 crore. The second tranche comes a year after the microfinance institution raised the first tranche led by Citi Venture Capital International (CVCI).

The current funding was led by existing investor Caspian Advisor’s India Financial Inclusion Fund (IFIF) and a new investor – GAWA Microfinance Fund. Existing investors CVCI and hedge fund Tree Line Asia Master Fund (Singapore) Pte Ltd also participated in this round. Enam Shares & Securities Pvt Ltd also took part in this round of funding. Unitus Capital was the lead financial advisor and arranger to Janalakshmi and its shareholders for the transaction.

Janalakshmi, founded by former Citigroup banker Ramesh Ramanathan, provides micro loans in urban areas. Its management team has over 200 years of cumulative banking experience and includes key figures such as R. Srinivasan who has more than three decades of experience at ANZ Grindlays, Fitch Ratings and JPMorgan, and V.S. Radhakrishnan, a veteran banker with over 25 years’ experience with HSBC and ING Vysya Bank.

In March 2010, Janalakshmi raised $10 million in a round led by Treeline Asia Master Fund, one of the largest hedge funds in Asia. Its investors also include Narayan Ramachandran, former country head of Morgan Stanley India, Bellwether Microfinance Fund, Lok Capital and the Michael and Susan Dell Foundation.

Lok Capital, which had made a partial exit in the previous round in June 2011, did not sell any stake in the current round.

Janalakshmi Financial Services is a for-profit NBFC and urban MFI with assets of more than Rs 500 crore and the promoters’ stake held in the not-for-profit entity Janalakshmi Social Services. This is the only MFI in India structured to keep the social spirit intact, according to information available on the company’s website.

According to its site, Janalakshmi Financial Services had revenues of Rs 71 crore for FY12 (as compared to Rs 47.65 crore in FY11) with profit of Rs 1.22 crore (against loss of Rs 2.17 crore in the previous year).

Ramanathan also forayed into low-cost housing space with Janaadhar Constructions Pvt Ltd, floated by Janalakshmi Social Services, to provide homes for the unorganised sector.

“As early investors in Janalakshmi (through our first fund Bellwether), we are delighted to continue and deepen this relationship. Janalakshmi is a unique MFI that strives to provide a wide range of products and services to the clients. The company has evolved remarkably over the years, remaining true to its original goals and demonstrating alternative ways to deliver microfinance services,” said Viswanatha Prasad, managing director of Caspian Advisors.

“Janalakshmi Financial Services is a new-age financial sector story, built around well-thought-out targets and apt technology used to deliver affordable service to its customers. Its patient, long-term institutional framework gives us the comfort of solid, long-term returns,” said Vallabh Bhanshali, chairman of Enam Group.


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